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Connectivity is a fancy word for faster journeys

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Drawing on how “connectivity influences productivity and competitiveness today”, KPMG’s 2013 analysis of HS2 regional impacts (commissioned by HS2 Ltd) looked at “the potential benefits in a different way to those captured in more traditional appraisals”.

Jim Steer and Bridget Rosewell

Jim Steer (SDG) and Bridget Rosewell (Volterra)

But what exactly is meant by “connectivity“?

According to Steer Davies Gleave’s Jim Steer — speaking as a member of the first panel at the House of Lords Economic Affairs Committee HS2 session on 21 October — connectivity “is a fancy word for faster journeys”.

[House of Lords Economic Affairs Committee]

Tuesday 21 October 2014
Committee Room 1 […]
Economic Case for HS2

Witnesses
i. Bridget Rosewell, Volterra Consultants; Lewis Atter, KPMG; and Jim Steer, Steer Davis Gleave Consultants

ii. Professor Stephen Glaister

Professor Stephen Glaister

Professor Stephen Glaister (RAC Foundation)

HS2 is a proposed railway linking the centres of three provincial cities with London (~80% of travel would involve London as origin or destination). So the connectivity benefits of HS2 — using Mr Steer’s description — translate to ‘the benefits of speeding up rail journeys between London and Birmingham, London and Manchester, and London and Leeds’. However, KPMG’s Lewis Atter described connectivity in terms of journey-time-plus-financial-cost-of-travel and suggested that HS2 “connectivity gain” would be reduced if it used a premium fare structure, implying some relation between connectivity and consumer surplus.

Mr Steer suggested that if the high speed line were operated with premium fares, there would still be cheap tickets, ‘like Eurostar’ (needless to say, Eurostar’s cheap tickets have come at the cost of a UK taxpayer loss running into hundreds of millions of pounds).

Mr Atter said that KPMG’s ‘£15 billion’ benefit was an estimate of the difference in size of the 2037 economy with and without HS2, and although the figure looked large, it would represent less than 0.5% of the economy at that date. However, as Professor Stephen Glaister said in the second part of the session, the present value of a stream of future £15 billion annual benefits would be astronomical, “if you believe it” (KPMG have been strangely unwilling to provide a PV figure, although it is readily calculable).

Bridget Rosewell told the committee that HS2 should be routed into city centres, not parkways (Volterra was contracted to argue for a city centre station in Sheffield, but was also contracted to argue for a parkway station in the East Midlands, instead of central Derby).

Disruptive technologies could have large and unforeseeable effects on the service economies in the HS2 station cities, before the new line was even completed. Prof Glaister pointed out the sensitivity of HS2 forecasts to future events, and even to the discount rate applied to the calculation. He was sceptical of HS2’s capacity case, including the scope for classic released capacity, and seemed to be airing the idea of buying off special interests (presumably councils in the North) as an economically superior alternative to building HS2.

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Written by beleben

October 22, 2014 at 12:23 pm

One Response

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  1. There would certainly be HS2 connectivity between London and Birmingham, but it would serve to draw Brum more into the vastly bigger London economy and worsen the North South Divide. And, although HS2 would fast-connect London to Manchester and London to Leeds, HS2 would not improve connectivity between these two cities.

    But, even an HS1-spec connector between Manchester Victoria and Leeds would do more for northern connectivity than HS2. It would fast-connect the East Lancs rail network through to the West Yorks network and open a Northern Cities Crossrail from Liverpool in the west to York and Hull in the east.

    The NorthStart website has been proposing this since shortly after HS2 Stage 1 was announced:

    http://hsnorthstart.wordpress.com/

    My own submission to the Lords HS2 Committee, arguing the same, is at:

    http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/economic-affairs-committee/the-economic-case-for-hs2/written/12600.html

    A software fault seems to have shunted my Para.9 behind my submission plan; it just says that the NorthStart scheme follows existing transport corridors where possible, but HS2 does not.

    Michael Wand

    October 22, 2014 at 3:09 pm


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